Use the Following Profit Function (Per Worker)for the Blue Delta

question 22

Multiple Choice

Use the following profit function (per worker) for the Blue Delta Faucet Company to answer this question. P(e) = 40e - (2e² + 100)
Note that P = firm profits and e = worker-hours per day.Assume that effort is observed perfectly.What is the profit-maximizing level of effort for the firm to set for workers?

• A) There is no effort level that maximizes profits in this case.
• B) 3.16 hours per day.
• C) 8 hours per day.
• D) 10 hours per day.
• E) 12 hours per day.

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Definitions:

Transactions

Financial activities involving the exchange of goods, services, or funds between two parties.

Common Stock

A type of security that signifies holding an equity stake in a corporation, indicating ownership in the company.

Dividends

Profits paid out by a company to its stockholders, frequently as a distribution of earnings.

Asset Account

An account on a company's balance sheet that represents the resources owned by the company that have economic value.